United Drilling (UNIDT)

Score breakdown: P/E: 2/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Sales growth of 45.03% and profit growth of 108.02% show strong momentum
• Low debt/equity of 0.11 provides financial stability
• High promoter holding of 74.65% aligns management with minority shareholders
• Piotroski F-Score of 7/9 indicates improving financial health
• PEG of 0.26 suggests modest valuation relative to recent growth

Concerns

• ROE of 6.97% and ROCE of 7.71% are weak, indicating poor capital efficiency
• P/E of 19.72 and P/B of 1.73 leave limited margin of safety if growth slows
• Dividend yield of 1.03% offers little downside support
• Small market cap and insufficient FairStock data limit assessment visibility

AI Analysis

At ₹216, United Drilling capitalizes at just ₹355 Cr—a small-cap industrial. The market is paying 19.7 times earnings, which seems reasonable given the reported 108% profit growth, but I've learned to distrust growth rates that look this good. Graham would ask for a margin of safety. Book value is ₹125 per share, so I'm paying 1.73 times book for a business that earns only 6.97% on equity and 7.71% on capital. That is a mediocre return on tangible assets—not the kind of franchise I want to own for decades. Still, the balance sheet is solid: debt/equity is just 0.11, and a Piotroski F-score of 7 suggests fundamentals are improving. Promoters hold 74.65%, so interests are aligned. The latest quarter shows sales of ₹50 Cr and net profit of ₹5 Cr, roughly consistent with annualized figures. The 45% sales growth and PEG of 0.26 give the appearance of a bargain growth stock, but low ROE tells me that growth may be consuming capital rather than generating it. Is this a durable compounder or a cyclical spike? I cannot be sure from these numbers alone. The dividend yield of 1.03% is negligible; I am being paid nothing to wait. I would not chase this purely on PEG, because the 'G' may not be sustainable. I need to see whether that 108% profit jump comes from real operational leverage or a one-off. Until I see ROE climbing toward 15% and proof that growth persists, this stays a watchlist candidate—not a core holding.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer